Policyholder Pulse
Insurance coverage litigation can be lengthy and is usually complex, and these characteristics are only exacerbated by the need to comply with often arcane state law rules of procedure. New Jersey, long a hotbed of insurance litigation, has too often exemplified this reality. Until now.
On September 1, 2018, new procedural rules (Rule 4:102-105) became effective in the New Jersey Superior Court’s Complex Business Litigation Program (CBLP). These new rules, similar to the federal rules, are designed to simplify case management and discovery in complex commercial and construction cases in New Jersey state court. The CBLP is overseen by a judge in each county who is experienced in complex commercial litigation. To be eligible for management in the CBLP, cases typically must involve a minimum amount in controversy of $200,000. However, parties can move to have cases that don’t meet the threshold heard in the CBLP under certain circumstances. Below is a summary of the more important rule changes:
Initial Conference: Similar to FRCP 26(f), the parties must meet and confer at least 21 days before a scheduling conference is held or a scheduling order is due, to discuss anticipated discovery needs and issues, and to develop a proposed discovery plan to be submitted to the court. CBLP judges must hold an early initial conference and must, within the earlier of 90 days after any defendant has been served with process or 60 days after any defendant has appeared, issue an initial Case Management Order. However, the parties may agree to modify interim deadlines without court approval, as long as the change does not impact the discovery end date.
Initial Disclosures: Parties in the CBLP must now make, within 14 days after the Initial Conference, initial disclosures similar to those required under the Federal Rules of Civil Procedure, including: a list of all individuals likely to have discoverable information; copies (or a description) of all documents; electronically stored information and tangible things in the party’s possession that the party may use to support its claims or defenses; a computation of damages, including non-privileged documents upon the basis of which the computation is made; and copies of applicable insurance policies.
Spoliation of Electronically Stored Information: With regard to e-discovery, the new CBLP rules state that, if electronically stored information that should have been preserved is lost because a party failed to take reasonable steps to preserve it and it cannot be restored or replaced, upon a finding of prejudice to another party, the court may order measures no greater than necessary to cure the prejudice. If the party acted with intent to deprive the other party of the information, the court may: i) presume that the lost information was unfavorable to the party that lost it; ii) instruct the jury that it may or must presume the information was unfavorable; or iii) dismiss the action or enter a default judgment. However, there is a safe harbor provision for parties who act in accordance with a court order for the preservation of electronic data, precluding the imposition of sanctions for failing to preserve data beyond the scope of the order.
Categorical Privilege Logs: To avoid the cost and expense of detailed privilege logs, litigants may use “categorical” privilege logs, where categories of similar documents are set forth in the privilege log. If a party refuses to allow the other to use a categorical approach and instead demands a document-by-document listing, the producing party can file a motion to allow it to use a categorical approach, or to allocate costs, including attorneys’ fees, that it will incur in preparing a document-by-document log.
Motion Practice: Parties must meet and confer in an attempt to resolve discovery issues before bringing the dispute to the court’s attention. Additionally, the rules now require the party seeking relief to first write to the court setting forth the issues in dispute and each party’s position on each issue. Counsel must then participate in a telephone conference with the court in an effort to resolve the discovery dispute. If the conference does not resolve the dispute, then the court will set a briefing schedule.
Summary Judgment Motions: Instead of adhering to the default schedule contained in Rule 4:46, the parties in the CBLP must confer and agree on a briefing schedule for dispositive motions. After a motion has been fully briefed, the moving party is to advise the court, and also request the clerk to place the motion on the court’s calendar within 30 days of the submission date.
Among other types of cases, insurance coverage disputes may be filed in the CBLP. This presents an opportunity for faster resolution of coverage cases and more streamlined discovery in New Jersey state court than litigants have experienced in the past.